What are we funding?
GRANT AMOUNT | ENDORSEMENT DATE | ACTIVITIES | INSTRUMENTS SUPPORTED | WB PROJECT |
US$5.3 million | August 31, 2020 | Developing a macro/sovereign insurance product for financial protection against flooding and a CAT bond for protection against earthquakes. Both instruments will help protect the FSEC from depletion in case of severe climatic events. |
| Strengthening Morocco’s Financial Resilience to Climate Physical Risks (P175523) Approved on June 28, 2023 |
- Morocco and the World Bank have collaborated for over 15 years to strengthen the country’s disaster risk response framework and increase the use of pre-arranged financing. In 2016, the government passed a law requiring insurers to cover earthquakes, floods, and tsunamis in insurance policies. Those who cannot afford private insurance are eligible to apply for compensation through Fonds de Solidarité contre les Évènements Catastrophiques (FSEC), which became operational in 2019.
- FSEC provides compensation to victims of disasters who are not covered by private insurance.
- A US$5.3 million GSFF grant is being used to reinforce the technical, operational, and financial capacity of FSEC and to increase relevant knowledge among Moroccan DRF practitioners. It covers the development of a macro/sovereign insurance product and a catastrophe (CAT) bond that will ensure FSEC has the financial capacity to continue providing emergency relief payments when a catastrophic event occurs. Actuarial modeling funded by GSFF has highlighted the rising cost of traditional macro/sovereign insurance and the growing value for money provided by CAT bonds. Both instruments are expected to be placed in 2025.